Left a widow in 2009 I had to jump in at the deep end. We had bought an investment property and had renovated a couple of houses that we flipped with a little success but that was the sum total of my knowledge. I couldn’t afford to stay a novice. I consulted financial planners, stock brokers and I started looking through the newspapers and goggling information available locally. I also signed up to attend seminars, forums, industry workshops put on by government agencies, financial planning groups and organizations. I went to free ones and I went to paid ones. I was on a mission to find out as much as possible.
Eventually I joined AIA, Australian Investors Association, an organization holding their national conference on the Gold Coast, my backdoor. There was so much to take in. How much risk could I take emotionally; how much risk should I take for my investment? What is risk for that matter? Should I diversify my portfolio? What are fixed income products and what does buy and hold mean? Term deposits, stocks, banks, stops, safety....stop the boat so I can get off. The questions are endless and nine years later and I am still asking questions and still learning.
It’s not possible to know everything about everything. The dot theory is useful for this. You find one thing that works and concentrate on that because it takes many years to accumulate the nest egg. Unfortunately those hard earned savings can be easily fritted away with wrong investments choices, and the older we get the harder it may be to replace our losses.
I have paid people to give me advice and joined their investing groups for tips and had mixed results. I have learnt I need to be wise in this. I have tried to protect myself by splitting by portfolio into 3 major classes.
- 1. Fixed income products;
- 2. Australian shares;
- 3. Overseas shares.
I am now investing in growth companies with good fundamentals with good prospects for growth and thus more opportunity for the share price to go up. A lot of retirees, especially older retirees invest in large companies with stable share prices that pay good dividends. I also take more notice of the percentage return an investment will bring and if that will be higher than the inflation rate because over time the buying power of our money deteriorates and a dollar will buy less and less.
Deciding what type of investor you want to become and suits your circumstances is a decision you need to make. We are blessed in Australia to have great organizations like AIA. It is a not for profit organization set up by investors for investors. Education is the key to keep moving forward and the AIA provides a safe environment to learn from industry experts, and offers networking opportunities with other investors.
There is much to learn and can seem daunting at first. Being in a safe environment while you learn can give you courage to start your self-directed investing choices or the courage to be able to query your financial advisors. Have a listen to my interview with an AIA director, Russell Lees, and see if this could be a good fit for you.